Problem Identification:
Charges imposed for EMS services are very low. The existing fee structure limits the City’s ability to recoup the rising costs of providing service.

Recommended Action:
Increase the charges for EMS services, to approach the levels allowed by federal reimbursement and third party payer plans.

Revenue Enhancement

Functional/Operational Area:

Estimated Annual Impact:

Estimated Implementation Costs:

Barriers to Implementation:
An increase to the City’s EMS fees would require City Council action. Potential opposition from citizens and the insurance industry.

Projected Implementation:
180 days

Next Steps:
Evaluate the City’s existing EMS fee structure, determine more appropriate rates, and take the appropriate legislative steps to initiate updating the fee structure.

Since FY89, the City has had the authority to charge fees for the Department’s ambulance services. The initial fee structure set the charges for basic life support (BLS) at $75 and advanced life support (ALS) at $100. The City can review the fee structure on an annual basis and change fees as necessary, so long as they do not exceed the City’s cost of providing service. The Department cannot, however, refuse service to anyone. A new rate structure for EMS service was instituted in January 1997, raising BLS and ALS service charges to $150 and $250, respectively.

While the updated fee structure implemented in mid-FY97 has improved the City’s ability to partially offset the cost of providing EMS service, in FY98 the Department’s direct cost of providing ambulance service exceeded $10.3 million, but it only collected approximately $3.7 million in service reimbursements’less than 36 percent of the City’s direct cost of providing service. Additionally, the City’s EMS fee structure does not assess charges for EKG, oxygen, and transportation services although these services are eligible for third-party payor reimbursements.

In general, municipalities have been reluctant to increase EMS-related fees for fear that patient populations that can least afford to pay will be the hardest hit. This assumption is not accurate. While Baltimore currently does not collect information about the source of payment for EMS services (an issue later addressed in Recommendation 7-A), a review of billing information performed as part of a 1997 analysis to increase Philadelphia’s EMS fees showed that over 90 percent of Philadelphia’s revenues came from third-party payors (Medicare, Medicaid, and private insurance).

Finally, a review of the EMS fee structures in peer cities shows that Baltimore’s current fee structure is comparatively very low.

City ALS BLS Oxygen EKG
New York $450 $350 $50 Included
Philadelphia $350 $350 $40 $80
Washington $362 $207 None None
Baltimore $250 $150 None None

The financial impact of even a modest fee increase is difficult to estimate given the variability of the number of billable EMS runs, the Department’s billing and collection practices (related recommendations included throughout this report), and the insurance industry’s ever-changing reimbursement policies. If, however, the Department encountered the same demand for service as it did in FY99, maintained only its current success in collection efforts, and the average reimbursement was improved by just $50 per collectable EMS run, the corresponding revenue impact would exceed $1 million annually. It should be noted that this represents a very conservative estimate that could be significantly increased with the implementation of other recommendations included herein.